☠️ Why healthcare startups fail
Plus: The public digital health companies that de-listed in 2024
Hi all,
After a much needed break from X, this month I reluctantly came back. One of my first posts really hit a nerve with folks, reaching nearly 2K comments and over 24K likes. It was about picking up an Rx at CVS and how medication pricing is all over the place. We all suffer from this lack of transparency and consistency, and Americans are not happy about it. (Shout out to Mark Cuban, who I had on my podcast, for creating the first completely transparent virtual pharmacy).
Soon after this post, the NYT did a nice overview of the culprit: PBMs. It’s well worth the read.
Anyhow, I don’t mean for this month’s newsletter to be a downer. I’m actually still very much optimistic about the future of healthcare. We are at a tipping point, and good things are ahead.
☠️ Why healthcare startups fail
Most startups fail. It's the nature of entrepreneurship, and the healthcare industry is no exception. While egregious failures— like Done, uBiome, and of course Theranos— get outsized media attention… Very few failures in our space are actually rooted in fraud or intentional deception.
The difficulty of building in healthcare, combined with bad timing and bad luck, can lead to solutions that simply don't succeed, even when it comes from the best of intentions.
Startups are built upon dozens, if not hundreds, of assumptions about how the future will unfold. Founders assume a product will work as envisioned, that acquiring customers will be economically feasible, that somebody will pay for the product or service, that competitors will respond in a certain way, that the regulatory environment will remain favorable, that investors will fund them, and the list goes on and on. When a startup fails, it’s generally because one of the core assumptions did not pan out.
Read more, and let me know what you think about why healthcare startups fail!
🏦 Stock market de-listings in 2024
Speaking of failures, a swath of publicly traded digital health companies — many of which went public in 2020-2021— are delisting:
Science 37 sold for $38M in January
Invitae filed for bankruptcy in February
Cano Health filed for bankruptcy in February
MedAvail filed for bankruptcy in February
Better Therapeutics shut down in March
Cue Health filed for bankruptcy in May
Akili Interactive was acquired for $34M in May
23andMe was given 180 days to move its shares above $1 and avoid being delisted
In many ways, this process is a necessary growing pain for the digital health industry. Because of the pruning, the overall basket of digital health companies that remain is arguably stronger and better positioned for long-term success.
Download my List of Digital Health Companies - Unicorn, Public, and M&A
✍🏼 New blog posts
🎧 New podcast episodes
"Healthcare Is a Handmade Luxury Good" | Ro Co-Founder and CEO Zach Reitano
Overhauling Care Navigation | Transcarent Founder and CEO Glen Tullman
That’s a wrap for June!
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As always a great read thank you!
Great piece, as always, Halle! Keep up the fantastic work.